Q. I know I should be saving 10% of my income, but I just don’t make enough money. My bills take up just about all my paycheque. I can’t afford to save.

You can’t afford NOT to save.

I find that the very people who believe they can’t save somehow manage to give the bank $48 in overdraft fees each month, or $25 for late credit card payments.

So, I’d venture to say that if you can pay the bank this money every month involuntarily, there should be a way to squeeze out a few bucks to give to your savings account voluntarily.

What are you spending on? Do you bring home bags of stuff from the mall that you don’t need because there was a sale? Are you puffing away on cigarettes, buying lottery tickets and downing shots at the bar every weekend?

According to an Acorn “Money Matters” report on financial literacy, 41% of millennials admit to spending more on coffee last year than they invested in their retirement account.

I Don't Make Enough To Save

When you don’t make enough to save

  1. The first place to look is in your spending patterns. Go through your past bank and credit card statements with a fine-tooth comb. Almost everyone can find some things to reduce or eliminate completely.
  1. If too much debt is your problem, you need to develop an aggressive plan to pay it off. Each month will put you on a better financial footing. And, it’s not okay to continue buying stuff. The quickest way to get out of debt is to stop creating new debt.
  1. Don’t have an unrealistic savings goal. Maybe right now you can’t save 10%, or (gulp) 20% of your salary. Make a commitment to start saving something. Start small and train yourself to become a saver. You may only manage $10 a week, or $10 a month at first. Pick a goal you want to start saving for. Every little bit helps and it adds up. Then increase the amount as your financial situation improves.
  1. It can be hard to save if you have a small income. If you are unable to save much on your current income you need to increase it. You can’t just wait for times to get better. Find an additional source of income, or even a new job.
  1. You’re already on an austerity diet and have cut to the bone. You’ve got rid of cable, buy used stuff, use coupons, stay away from restaurants, and cut your own hair. Now, reassess your goals. Is this a temporary situation while you rigorously pay off your debts, get your start-up going, or reach the next rung of your career ladder? Also, look at your current lifestyle. There is almost always at least one more area that you can cut back on.
  • You can find a roommate or move to a less expense part of town.
  • You could downsize if your living space is more than you need right now.
  • Find a way to carpool to work, or ditch that pricey SUV altogether and take transit.

Final thoughts

Saving money is all about making sure your expenses don’t exceed your income – it’s not rocket science.

There are all kinds of excuses, but you will only save money when you make it a priority.

You’re not making it a high enough priority when you are unwilling to give up certain non-necessities, when you’d rather buy that pizza, latest iPhone, Smart TV, or living room furniture.

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15 Comments

  1. Cool Koshur on February 23, 2017 at 10:20 pm

    It is harsh reality that lot of people live on minimum wage and working 2 or even 3 jobs to pay for basic necessities like housing, transportation,utilities and food. There is nothing left for them to save. Good paying jobs are hard to find.

  2. darren on February 24, 2017 at 5:30 am

    If you pay yourself first and live off the rest then saving is easy. It all comes down to habits.

    • APF Blogger on February 26, 2017 at 7:59 pm

      @darren Pay yourself first was exactly what came to mind when I read “I find that the very people who believe they can’t save somehow manage to give the bank $48 in overdraft fees each month, or $25 for late credit card payments.” . The reality is we find a way to pay for rent, food, and basic transport. The next thing on the list should be paying yourself something (even 5% initially). Then with the money left over you buy your coffees, meals out, and iPhones.

  3. p duchaine on February 24, 2017 at 6:25 am

    From my own life experience. When you start using credit to pay for expenses above your income, you start falling. If you one could not balance income/expense one month, on the following months it gets harder as the expenses with the addition of interest (i.e. 20%+ credit card interest rate) is added.

    I am sure that many if not most younger people do not know that if you do not pay the CC statement in FULL, the interests is added to the total of that statement, not just the not-yet-paid part.

    IMBO, the only way to survive is not to spend more than one can afford – or you get stuck in a circle that is very hard to exit.

  4. J on February 24, 2017 at 8:38 am

    Good Jobs are not hard to find if you are willing to work and expand what you are ‘willing’ to do. I know lot of guys who ‘can’t find a job’.

    I graduated with a masters degree in engineering in 2009 and worked as a landscaper for months before i found a job in my field 2010. On my third company now and have settled in (5 yrs). Most engineers I know just don’t consider doing anything ‘beneath’ them because they have a degree. Give me a break – if you’re willing to work there is someone out there who will be willing to hire.

    For example – as a restoration engineer, I talk to contractors who are constantly, and i mean constantly looking for good labour – $20-$30 an hour depending on experience. The reason they are always looking? Guys aren’t willing to work and quit.

    Teaching my 8 year old son now – life isn’t easy for most and will run you over if you don’t find drive to make your way in the world. You have to choose to work – use those two minimum wage jobs to get yourself to the next step. Even then nothing is guaranteed.

  5. T on February 24, 2017 at 8:43 am

    I understand what the original person was saying. Obviously u don’t live beyond your means but I don’t pay overdraft fees NSF fees buy cigarettes etc etc I am 50 without a cell or car etc there is nothing left to cut back and still I can’t save !It’s not cuz we don’t know how to budget there is not enuf funds to do it all!

  6. Susan J on February 24, 2017 at 9:38 am

    Great article! I have always told my children it is not how much you earn it is what you do with what you have. In the job that I have watched people with minimal income get this so it is all about priorities. Just start saving. Anything. It’s about the habit.

  7. FritoPaws on February 24, 2017 at 10:21 am

    Automatic saving is another solution. Payroll deduction is the best as your net pay already includes the savings so you don’t feel “robbed”. I think banks will do weekly small withdrawals to RRSP accounts. The hardest part is taking the steps to get started,but the choices are out there.

  8. AM on February 24, 2017 at 1:04 pm

    “According to an Acorn “Money Matters” report on financial literacy, 41% of millennials admit to spending more on coffee last year than they invested in their retirement account.”
    I enjoy reading this blog, it’s one of the consistently good Canadian personal finance blogs out there. However, I’ve noticed over the last few months that there has been some age discrimination against so-called millennials. I understand that the above quote is from a survey, but it wasn’t necessary for the content of the post. Many people have trouble saving money, including T above who identifies as a person in their 50’s.
    I am a so-called millennial. I save 50% of my income. I do not drink coffee or tea. I do not smoke. I rarely drink alcohol, and when I do it is not in a bar. Personal finance is for everyone, not just the boomers and echoes.

    • boomer on February 24, 2017 at 2:09 pm

      @AM Yes, it’s unfortunate that we generalize about each age group. That survey merely fit my purpose and could easily have referred to any other named generation. I know lots of people at every age that are doing pretty well financially and don’t fit into the stereotypical generational mold reported in the media. I apologize for offending you.

      • Denis on February 25, 2017 at 7:52 am

        Don’t worry about it, Millenniums get offended easy if they are not in their safe space.

        Seriously this guy gets it. Me in 20’s and now retired at 54. You can save and invest early and retire (early) OR mope and say you cannot save and be working under someone until you drop (or be on SS / live on spam after working hard all your life).

        Another side, my daughter in law and her husband make so little (did their taxes) but have a great home , 2 young children and building their wealth. It can be done.

  9. lisa girdwood on February 26, 2017 at 9:25 am

    As a Certified Financial Planner I hear and see it all. I understand that it is really difficult if you only make minimum wage but there is a lesson to be learned. You either need to work another job or it should be a catalyst to go back to school. I was diagnosed with Fibromyalgia when I was 36 yrs old raising 5 boys. I not only was very ill but had to work full time hair styling to food on the table! When I got a little better I continued to work full time while I retrained for 4 yrs. I got my life license, mutual fund lic. Certified Financial Planning and my mortgage license. I have a hard time with any excuses since it is all about choices and we all make our own and are responsible for where we are at.

    • FritoPaws on February 26, 2017 at 9:59 am

      Here here! It’s the same with people complaining about not being able to afford a house in YVR or GTA. How about moving to a place you can afford! Lots of jobs all over the country where home ownership is achievable, you just have to take steps to get it done.

      • KC on February 27, 2017 at 10:34 am

        A big problem in trying to move is to save up 2 months of rent for another apartment. Hard to do if you’re already paying high rent. Of course, this would be the time to bring in some help.

  10. lisa girdwood on February 27, 2017 at 6:58 am

    I have found the best thing after working with many clients is to switch them to cash. I suggest no more than 25% of their income. All of their groceries and weekly spending has to come from that. It at least gets them started giving their money the attention it needs and stops adding in debt. I find they usually have some big aha moments! It’s a quick start while they are figuring out what they need to be doing.

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